What Is a Secured Loan?
A Secured Loan is a type of loan backed by collateral such as property, vehicle, fixed deposits, or other valuable assets. The collateral reduces the lender’s risk, often allowing lower interest rates and higher loan amounts compared to unsecured loans.
Key Features of Secured Loans
- Collateral-backed loans with lower interest rates
- Higher loan amount compared to unsecured loans
- Flexible repayment tenure depending on lender and asset
- Available for personal, business, and property needs
- Loan approval depends on asset value and borrower creditworthiness
Types of Secured Loans 2026
| Loan Type |
Collateral |
Interest Rate (p.a.) |
Repayment Tenure |
| Home Loan |
Property |
6% – 9% |
5–30 years |
| Car Loan |
Vehicle |
7% – 11% |
1–7 years |
| Loan Against Property (LAP) |
Residential/Commercial Property |
8% – 12% |
1–15 years |
| Secured Personal Loan |
Fixed Deposit / Gold / Other Assets |
8% – 12% |
1–5 years |
| Business Secured Loan |
Business Assets / Property |
9% – 13% |
1–10 years |
Eligibility Criteria
- Indian citizen with valid KYC documents
- Ownership of collateral with proper valuation
- Minimum age: 21 years; maximum: 65 years at loan closure
- Good credit history and repayment capacity
- Income proof for repayment verification
Documents Required
- Identity proof (Aadhaar, PAN, Passport)
- Address proof (Utility bills, Voter ID)
- Collateral documents (Property papers, Vehicle RC, FD receipt)
- Income proof / bank statements
- Loan application form with asset valuation
Secured Loan Example
If you take a ₹20 lakh secured loan against property at 9% interest for 10 years:
- Monthly EMI: ₹25,540 approx.
- Total interest payable: ₹10,64,800 approx.
- Total repayment: ₹30,64,800 approx.
Advantages and Disadvantages
Advantages
- Lower interest rates than unsecured loans
- Higher loan amounts allowed
- Flexible repayment tenure
- Multiple collateral options available
Disadvantages
- Risk of losing collateral in case of default
- Approval depends on asset valuation and creditworthiness
- Processing may take longer due to asset verification
Frequently Asked Questions (FAQs)
What types of collateral are acceptable?
Property, vehicles, fixed deposits, gold, or other valuable assets approved by the lender.
Can I prepay the loan?
Yes, most lenders allow prepayment, but check for any prepayment charges.
Is the interest rate lower than unsecured loans?
Yes, secured loans generally offer lower rates due to collateral backing.
How is loan amount determined?
Based on collateral valuation, borrower credit score, and repayment capacity.
Author: All Finance Store Secured Loan Team
Expertise: Corporate & Collateral Loan Advisory
Last Updated: January 2026
Disclaimer: This page is for informational purposes only. Secured loan terms, interest rates, and eligibility vary by lender. Always verify details with banks before applying.